Daschle's tax woes unlikely to impede role in health care

Friday

Jan 30, 2009 at 12:01 AMJan 30, 2009 at 5:00 PM

WASHINGTON (AP) - Former Sen. Tom Daschle, picked by President Barack Obama to lead the administration's health reform efforts, recently filed amended tax returns to report $128,203 in unpaid taxes and $11,964 in interest, according to a Senate document obtained by The Associated Press.

The White House acknowledged yesterday that "some tax issues" had emerged in connection with the nomination, but a spokesman said the president is confident the former Senate Democratic leader will be confirmed as the new health secretary.

Daschle filed amended tax returns for 2005, 2006 and 2007 to reflect additional income for consulting work, the use of a car service and reductions in charitable contribution deductions. He filed the returns after the announcement that Obama intended to nominate him to head the Department of Health and Human Services.

Most of the additional taxes resulted from unreported income from the use of a car service provided him by a close friend and business associate. The unreported income for that service totaled about $250,000 over the three years.

Daschle had unreported consulting income of $88,333 in 2007. He also had reductions to charitable contributions totaling about $15,000 over the three years covered, according to the Senate Finance Committee document. The document, marked "Confidential Draft," is a committee statement concerning Daschle's nomination.

The car service and the consulting income were received in connection with Daschle's business relationship with InterMedia Advisors of Englewood, Colo. Daschle is a limited partner and chairman of its executive advisory board. Daschle also is an independent consultant to InterMedia Advisors LLP of New York City.

Beginning in 2005, Daschle was provided the use of a car and driver by Leo Hindery, InterMedia's managing partner. The two have been personal friends for many years, the Finance Committee report said. Charges for the car and driver services were billed to InterMedia.

"Sen. Daschle told staff that in June 2008, something made him think that the car service might be taxable and disclosed the arrangement to his accountant," the committee statement said. "Sen. Daschle estimated that he used the car and driver 80 percent for personal use and 20 percent for business use. On Jan. 2, 2009, Sen. Daschle filed amended returns for 2005, 2006 and 2007 reporting the value of the car service as income."

The committee is scheduled to meet in executive session to discuss Daschle's nomination on Monday. A Democratic aide declined to comment on any issues discovered in the vetting process.

ABC News first reported on the tax issue yesterday evening.

A Daschle spokeswoman did not immediately return a message seeking comment.

White House spokesman Bill Burton said Daschle's role in the new Obama administration was not in danger of being derailed.

"The president has confidence that Sen. Daschle is the right person to lead the fight for health care reform," White House spokesman Bill Burton said. "In preparation for his nomination, Sen. Daschle and his accountant identified some tax issues and fixed them. They filed amended return with the IRS and made payments with interest."

Daschle paid the Internal Revenue Service taxes and interest for the error, which has delayed his confirmation.

Daschle, 61, was one of Obama's first announced Cabinet choices. He was also offered a newly created post, director of the White House Office on Health Reform. Combined, the two titles gave the former South Dakotan large sway over a campaign to change how the country addresses its health care and insurance systems.

The White House insisted that Daschle, 61, would move forward in those roles.

Jim Manley, a spokesman for Senate Majority Leader Harry Reid, also predicted Daschle would be confirmed.

Daschle was an early Obama supporter and a campaign chairman. He was one of Obama's top advisers on health care, having seen how the Clinton administration bungled it during the 1990s, and urged Obama to make his efforts more open and accessible to the public so people would have faith in them.

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